Suppose that you have noticed that almost all of the car dealers in your city are located along a three-block stretch of the same street. A likely reason for this clustering of car dealers is that:
A. each dealer sells a different brand of car, so they are not competitors and do not have to be concerned about the other dealers' locations.
B. the dealers are better able to form a cartel.
C. there is a social norm in that city that dealers follow in choosing location.
D. each dealer is attempting to locate closest to the customers.
Answer: D
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All evidence points to the fact that firms' market power within an industry and industry concentration ratios are
a. directly related, that is, firms' market power is high when concentration ratios are high b. inversely related, that is, firms' market power is low when concentration ratios are high c. totally unrelated, that is, they are directly related in some industries and indirectly related in others d. only moderately related, depending on the degree of competition in the industry e. low for monopoly and high for perfect competition
Which of the following is an advantage that a sole proprietorship has over all other types of firms?
a. unlimited liability b. easy access to capital markets c. all decision making belongs to the owner d. shared liabilities e. small scale of operation
A good provides __________ and a bad provides __________
A) utility; satisfaction B) disutility; utility C) dissatisfaction; satisfaction D) utility; disutility E) satisfaction; utility
If Moe’s has four workers, and Moe wants to improve his marginal product of labor, he should ______.
a. find higher quality workers
b. reduce the number of workers
c. pay his staff less
d. charge more for his bagels